China stocks continue slide despite calming efforts
By Pete Sweeney
SHANGHAI, June 29 (Reuters) - China's stock markets closed sharply lower on Monday after a frantically volatile day of trading, despite surprise monetary easing moves by the central bank at the weekend.
The People's Bank of China had said one of the goals of Saturday's decision to cut both lending rates and reserve requirements at some banks was to stabilise stock market fluctuations, but Monday's trade saw wild swings.
The chaotic trading day was an uncomfortable backdrop for policymakers in Beijing, where delegates from 57 countries gathered to witness the signing of the articles of agreement for a Chinese-led development bank, which is expected to rival institutions such as the World Bank and the Asian Development Bank.
At one point in the early afternoon the CSI300 index of the largest listed firms in Shanghai and Shenzhen was down over 7 percent, but less than an hour later it had recovered almost completely and crossed back into positive territory, leading to speculation that state-owned asset management companies had intervened to prop up the market at the last minute.
Even so, the CSI300 index closed down 3.3 percent at 4,191.55 points, while the Shanghai Composite Index lost 3.3 percent to 4,054.86 points, falling below its 100-day moving average for the first time since the rally began in the third quarter of 2014.
Hong Kong markets also dropped over 2 percent, with investors running for cover, worried that Greece might default in the middle of a Chinese stock market rout, amplifying the downside.
The sudden collapse of mainland equity markets has wiped a combined 16.35 trillion yuan ($2.63 trillion) off market capitalisation - more than the GDP of Brazil - since a June 12 peak, dealing substantial damage to retail investors' confidence in just a few short weeks.
Lu Yahu, a 40-year-old stock investor, said he would use any rebound as a chance to sell off his remaining stocks, as he's convinced the bull run is dead. Continuación...